Krugman: Friends of Fraud

[ProSense]

Friends of Fraud

By PAUL KRUGMAN

Like many advocates of financial reform, I was a bit disappointed in the bill that finally emerged. Dodd-Frank gave regulators the power to rein in many financial excesses; but it was and is less clear that future regulators will use that power. As history shows, the financial industry’s wealth and influence can all too easily turn those who are supposed to serve as watchdogs into lap dogs instead.

There was, however, one piece of the reform that was a shining example of how to do it right: the creation of a Consumer Financial Protection Bureau, a stand-alone agency with its own funding, charged with protecting consumers against financial fraud and abuse. And sure enough, Senate Republicans are going all out in an attempt to kill that bureau.

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So the consumer protection bureau serves a vital function. But as I said, Senate Republicans are trying to kill it.

How can they do that, when the reform is already law and Democrats hold a Senate majority? Here as elsewhere, they’re turning to extortion — threatening to filibuster the appointment of Richard Cordray, the bureau’s acting head, and thereby leave the bureau unable to function. Mr. Cordray, whose work has drawn praise even from the bankers, is clearly not the issue. Instead, it’s an open attempt to use raw obstructionism to overturn the law.

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http://www.nytimes.com/2013/02/04/opinion/krugman-friends-of-fraud.html

It's a good thing that Elizabeth Warren is now on the Senate Banking Committee.

Statement from Sen Elizabeth Warren on re-nomination of Richard Cordray to lead the Consumer Financial Protection Bureau

"I am very pleased that the President has decided to re-nominate Rich Cordray as Director of the Consumer Financial Protection Bureau. I worked with Rich to set up the agency and believe he is a strong leader with a proven track record of fighting for consumers and pushing for a level playing field between big banks and smaller financial institutions like community banks and credit unions. The CFPB has had an extraordinary first year and a half - holding credit card companies accountable for cheating consumers and adopting the first set of rules to clean up the mortgage market. Senate confirmation of Rich's nomination will continue this momentum, benefitting families, establishing certainty, and safeguarding the economy as a whole from reckless and dangerous consumer lending."

http://www.warren.senate.gov/record.cfm?id=339361

[ProSense]

1. Kick! n/t

[pampango]

2. I look forward to the hearing on Cordray's nomination. We can't make republicans care about the 99%,

but we can give them the opportunity to make themselves look stupid. We will see if they have learned anything from the electoral fiasco they suffered through last year or whether they will all continue to play the public role of Wall Street's defenders.

Richard Cordray CFPB Confirmation Imperiled By Senate Republicans, Again

Get ready for a replay of last year's bitter fight over confirming Richard Cordray to lead the Consumer Financial Protection Bureau.

Along with 42 Senate Republicans, Senate Minority Leader Mitch McConnell (R-Ky.) sent a letter to President Barack Obama on Friday, vowing to block any CFPB nominee until Congress passes a law to revamp the agency. Obama has already re-nominated Cordray to stay on as the CFPB director.

CFPB launched in July 2011 but, because of the protracted fight with Republicans, went without a director for months until Obama put Cordray in the post. The bureau was the brainchild of now-Sen. Elizabeth Warren (D-Mass.) and was created as part of Dodd-Frank financial reform legislation -- a bill opposed by every Republican -- to monitor the activities of non-bank entities, including payday lenders, debt collectors and credit reporting agencies. Many of those entities were "the source of some of the most harmful, deceptive, unfair and predatory lending practices" that led to the 2007 financial crisis, Deputy Treasury Secretary Neal Wolin has said.

"The establishment of the Consumer Financial Protection Bureau was to make sure that average Americans who do business with and have dealings with financial institutions have somebody in Washington looking out for their interests," (White House press secretary Jay) Carney said during his daily briefing. "Financial institutions have plenty of people looking out for theirs."

http://www.huffingtonpost.com/2013/02/01/richard-cordray-cfpb_n_2599838.html